Looks like there’s been a bit of a pullback in U.S. advertising spending in Q2.
Advertisers reduced spending “on most types of traditional media as well as on online desktop display ads in the second quarter,” according to a new report from Kantar Media, reports the Wall Street Journal.
The total spent fell 3.9 percent in the latest period to $38 billion, Kantar Media’s data reveals, as advertisers reduced spending on 15 of the 22 media categories analyzed in the report.
“The analysis from Kantar Media, a unit of WPP, includes ad spending on traditional media and paid search and online display, but does not include spending for other fast-growing digital mediums such as online video and mobile,” notes the WSJ.
While cinema ad spending jumped 15 percent (the biggest growth rate of any individual media type), it constitutes a mere fraction of major marketers’ ad spending.
While “the migration of money to digital is certainly shaping the results we’re seeing here,” it’s not the only factor at play, said Kantar Media Chief Research Officer Jon Swallen.
Some of the most pronounced ad expenditure declines, such as those experienced by newspapers, magazines, and Spanish-language TV, are so large that “digital couldn’t possibly explain all of the negative number,” Swallen explained.
Worst news? Even mature areas of digital advertising — in particular, online display — “are beginning to suffer,” Swallen said.
According to Kantar Media, measured media spending is expected to lag nominal GDP for the fifth consecutive year since the recession, which is “highly, highly unusual,” according to Swallen.
“It speaks to the fragmentation of media advertising,” Swallen said. “It speaks to all of the different places that are competing for ad money which puts downward pressure on ad pricing.”
It also reflects to some extent a slowdown in various sectors of the economy that many marketers depend on to fund marketing budgets, he added.
“Within the digital categories that Kantar Media’s report analyzed, results were mixed,” according to WSJ’s report. “Paid search — text ads on Google and Bing delivered to desktop PCs, and tablets — increased 7.7 percent for the period. In contrast, online display advertising, which doesn’t include video or mobile ad formats, fell 4.7 percent in the quarter, due in part to lower CPMs and reduced page traffic.”
Those lower audience levels “may in fact be the cannibalization of users moving from desktop to mobile devices.”